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Levy to rise as disaster fund runs dry

NZ Newswire logoNZ Newswire 25/05/2017 Karen Sweeney

Homeowners will have to fork out more on their insurance to rebuild the Natural Disaster Fund after the latest Kaikoura and Seddon earthquakes emptied its reserves.

The Earthquake Commission's government guarantee and $4.6 billion in re-insurance cover means money will be available for future natural disasters, but Gerry Brownlee as minister responsible says the fund needs to be replenished.

Insured homeowners are currently charged 15c per $100 of insurance coverage, but that will rise to 20c from November 1.

The maximum charge will rise to $276 a year from $207.

"It would currently take more than three decades before the NDF reaches EQC's reinsurance excess of $1.75b - that's in the absence of any significant natural disaster like the Kaikoura earthquake," he said.

The new rate means it could be achieved within a decade.

Mr Brownlee said he doesn't expect a government review of the Earthquake Commission Act to further impact levy rates.

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